Rinehart finally reveals Hancock finances

Peter Ker and Ben Butler

Mining billionaire Gina Rinehart's long battle to avoid scrutiny of her main company Hancock Prospecting has ended, after two long-overdue annual reports were filed to the Australian Securities and Investments Commission on Christmas Eve.

Ms Rinehart, considered by some measures to be the world's wealthiest woman, had long fought ASIC's demand for the reports to be filed on the grounds it would reveal commercially sensitive details around her lucrative iron ore partnership with Rio Tinto, as well as her plans to build a massive new iron ore mine at Roy Hill in Western Australia.

Battle for the books ... Gina Rinehart's Hancock Prospect paid more than $12 million in dividends in 2011. Photo: Nic Walker

Many observers also believe the details of massive profits being made by Hancock Prospecting were sensitive in the context of Ms Rinehart's legal battle with several of her own children over the amount of money due to be paid to family trusts.

But ASIC's will has finally prevailed, and the documents filed on Christmas eve show that the period between July 2009 and June 2011 - the period covered by the two reports - was very lucrative for Hancock Prospecting.

Profits rose from $688 million at June 30 2010, to just under $1.2 billion at June 30, 2011.

The private, unlisted company paid dividends of $6.1 million at June 30, 2010 and more than doubled that figure to $12.496 million a year later.

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The bulk of Hancock Prospecting's revenues come from a joint venture partnership with Rio Tinto at the Hope Downs iron ore mines in Western Australia's Pilbara region.

The reports show that Rio Tinto loaned money to Hancock Prospecting to allow Ms Rinehart's company to contribute its share of funds to the latest mine built under that joint venture, and at June 30, 2011, Hancock still owed more than $83 million to Rio Tinto under that loan.

But the company has also enjoyed significant revenue streams - about $US735 million - from the sale of coal assets in Queensland to Indian group GVK in late 2011.

The reports show that Hancock Prospecting was yet to determine what liabilities it might have under the Federal Government's mining tax: a tax that Ms Rinehart has campaigned against publicly.

Under a section called "contingencies", Hancock Prospecting reveals that several of its tenements have been the subject of native title claims, however the lucrative Hope Downs tenements were not expected to be vulnerable to such claims.

Other sections of the reports hint at other legal battles Ms Rinehart is engaged in, without clarifying the particular case or opponent.

''Certain companies within the group are parties to a claim in respect of royalties from the Hope Downs mine. The claim is being vigorously defended. At this time it is not possible to quantify what, if any, damages could be awarded if the claim were to be successful," said a clause in the 2011 report.

Apart from the legal battle with some of her children, Ms Rinehart has also fought claims made by the Wright family, who are descendants of Peter Wright, the business partner of Ms Rinehart's father Lang Hancock.

''Certain companies within the group are party to various other legal actions and claims. It is the opinion of the directors that there are no significant liabilities arising from such legal actions and claims that would have a material adverse effect on the consolidated financial statements.''

Aside from its prime operations in mining, Hancock Prospecting also owned $60,000 worth of livestock at June 30, 2011.

Hancock Prospecting owns about 70 per cent of Roy Hill Holdings, the company through which Ms Rinehart is seeking to build the nation's next big iron ore mine, rail and port project.

Korean giants POSCO and some Japanese companies are also involved in Roy Hill Holdings, and efforts are underway this year to secure the necessary finance to build the project, which is estimated to cost close to $10 billion.